Ukrainian Leaders Found Themselves on the Opposite Sides of the Pipeline
// The President and the Prime Minister struggle on the energy front
Ukraine’s President and Prime Minister tackle energy
According to the information of Kommersant, Ukraine’s President Victor Yushchenko and Prime Minister Yuliya Tymoshenko have delivered two competing energy plans for the country. Friday, speaking at the Energy Summit in Kiev, Victor Yushchenko suggested creating a gas transporting OPEC, which will transport energy resources omitting Russia. In her turn, Yuliya Tymoshenko intends to settle the gas dispute with Russia promising Russia to prolong the treaty on its Black Sea Fleet deployment and suspend Ukraine’s NATO plans.
Friday, at the Energy Summit in Kiev Victor Yushchenko spoke about his vision of providing energy security for Ukraine taking account of the constant rows with Russia. The essence of his proposals boils down to setting up an international body that’ll engage in pumping energy resources from the Caspian sea to the Baltic region omitting Russia. According to the information of Kommersant, Kiev has held talks about its creation for months already. A high-ranking official told Kommersant, “It’s a matter of founding an inter-state alliance, which will aim to address energy transportation related issues on a common basis.” The official specified that the organization will regulate tariffs, which will allow Kiev and other members to increase oil and gas transition rates.
The participants of the summit didn’t have a common stance towards the proposal. Georgia supported Victor Yushchenko’s initiative, whereas Azerbaijan remained neutral. So, the position of the EU members – Poland, Lithuania, Latvia and Estonia – was decisive. Thursday, ahead of the summit, the heads of state of these four countries met in Riga to work out a common approach. As a result, Poland and the Baltic states preferred to think it over once more. At the Kiev Summit the parties didn’t adopt Victor Yushchenko’s conception of setting up a gas-transport OPEC. Instead, the participants issued a communiqué declaring ready “to consider the possibility of creating a common energy-transit space, which will aim for developing reliable routes of energy carriers transportation to the EU and other global markets.”
Besides, the participants of the Energy Summit stated they set up an ad hoc committee, which will engage in “working out mutually acceptable mechanisms and principles of the functioning of the future alliance.” The conclusions of the group will be ready by the next Energy Summit, which will be held in Baku this November. Only then will you see whether the plan of creating the new alliance has a chance to be realized, or whether it will remain a project merely.
Despite the Summit’s insignificant outcome, Victor Yushchenko can take home policy advantage of it. From the President’s viewpoint, Ukraine’s membership in a gas-transport OPEC, working for the benefit of the EU, will make Ukraine’s ties with the united Europe closer and consolidate Kiev’s position in its gas conflicts with Moscow. So, the President will be able to style himself as the author of a strategy that secures a European future for Ukraine, and thus score some more points in his struggle against Yuliya Tymoshenko.
In her turn, Yuliya Tymoshenko is preparing a counter-attack, with the Russian gas issue being focused on. Friday, as Victor Yushchenko spoke about founding a gas-transport OPEC at the Kiev Summit, the Prime Minister set off for Minsk to take part in a summit of Chairpersons of the CIS states, where she conducted negotiations with Russia’s Prime Minister Vladimir Putin. On completion of the talks the PMs made no secret of the fact that they discussed the cooperation of Russia and Ukraine in the gas sphere. Vladimir Putin thanked Ms Tymoshenko for “the prompt decision of paying the debt” and stated that “Gazprom can work with Naftogaz directly in future.” “There are no problems preventing us from doing so, except for one matter: We need to settle the disputes of the past years so that the so-called intermediaries could meet their engagements,” Russia’s Prime Minister underscored.
It means that Vladimir Putin and Yuliya Tymoshenko negotiated the elimination of intermediaries from the gas relations between Moscow and Kiev, and the concluding of contracts between Naftogaz and Gazprom directly. Moscow only insisted on Rosukrenergo’s (50% of the company’s assets is owned by Gazprom, and the rest 50% – by Ukrainian businessmen Dmitry Firtash and Ivan Fursin) returning past credits and remaining debts to the state monopoly for Russian gas supplies to Ukraine, the total sum amounting to $1.5 bln. A representative of Gazprom confirmed to Kommersant the reaching of an agreement of that kind in Minsk.
“We’re looking forward to the beginning of talks about signing a strategic treaty on gas supplies and are aware of the fact that we should gradually proceed in the market price direction,” said Yuliya Tymoshenko summing up the outcome of the Minsk negotiations. According to the information of Kommersant, last week Ukraine’s Naftogaz Chief Oleg Dubina handed over a project of the agreement to Moscow. At that, Ms Tymoshenko expressed hope that the counterparts will manage to sign a document for five–ten years, and Vladimir Putin couldn’t help stressing that it’ll depend on “the financing of current payments for Russian gas on time.”
At that, according to the information of Kommersant, the Russian and Ukrainian Prime Ministers touched upon a wider range of matters during their Minsk talks. Officials with Gazprom and Naftogaz reported that Vladimir Putin and Yuliya Tymoshenko discussed the future of the Black Sea Fleet and Ukraine’s NATO prospects in connection with the gas deals. Yuliya Tymoshenko linked these issues as far back as 2006 declaring from the Verkhovna Rada tribune, “If Russia takes a few steps like raising gas prices, the Crimea will be the first to head for NATO.”
Nonetheless, according to the information of Kommersant, during a meeting with Vladimir Putin on February 20 the Ukrainian Prime Minister interpreted this formula differently. A source close to Yuliya Tymoshenko told Kommersant that she promised not to foster Ukraine’s joining NATO, prolong the deployment of the Russian Black Sea Fleet after 2017 and allow Gazprom to manage Ukrainian gas-transport assets. In exchange, Ms Tymoshenko asked Russia to back her candidature in Ukraine’s Presidential election of 2009 and keep gas prices for Ukraine at a relatively low level. According to the source of Kommersant, the parties agreed to “proceed in this direction.”
So, Yuliya Tymoshenko can style herself as a politician able to conduct dialogue with Moscow and secure affordable gas prices for Ukrainian voters. If she pulls it off, Ms Tymoshenko’s chances to become President will rocket. All the same, it’s not obvious that the Kremlin is ready to put a stake on the orange princess. “Trusting Yuliya Tymoshenko is the worst thing you can do,” an official with the Administration of the Russian President told Kommersant. Verkhovna Rada MP Vassily Kisselev shares this viewpoint, “Yuliya Tymoshenko could offer Russia everything, including political preferences. But you should bear in mind that Ms Tymoshenko has quite an experience of resolving such complex dilemmas. At the right time she’ll find a pretext to avoid meeting her engagements securing low gas prices for some time.
Natalya Grib, Sergey Sidorenko; Kiev; Alexander Gabuev
All the Article in Russian as of May 26, 2008
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